ASSET PURCHASE AGREEMENT
AGREEMENT dated as of January 31, 1997 between CUISINE DE FRANCE LIMITED, a
Delaware corporation ("Seller"), and Sabatier USA, LLC, a Connecticut Limited
Liability Company ("Purchaser") and, as guarantors, ROBERT CANDLER and ROBERT P.
WOLFF.
W I T N E S S E T H:
WHEREAS, Purchaser desires to acquire, and Seller wishes to sell and
transfer to Purchaser, certain of the assets and properties of Seller, subject
to the assumption by Purchaser of certain liabilities, all upon the terms and
conditions hereinafter set forth; and
WHEREAS, Messrs. Candler and Wolff own Purchaser; and
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties hereto agree as follows:
SECTION 1. Assets to be Sold and Purchased.
A. Subject to the terms and conditions hereof Seller agrees to sell,
transfer, convey, grant, assign and deliver to Purchaser, and Purchaser agrees
to purchase, accept and receive from Seller all of the following assets of
Seller (such assets being sometimes collectively referred to herein as the
"Purchased Assets"):
(a)Inventory. All inventories of Seller, described on Schedule 1(a) hereto
(the "Purchased Inventory").
(b) Contracts. All of Seller's rights in, to and under all of the contracts
and agreements of Seller described in Schedule 1(b) hereto (the "Purchased
Contracts").
(c)Rights to Tooling. All of the Seller's rights, if any, with respect to
tooling paid for or partially paid for by Seller and held by suppliers, as set
forth in Schedule 1(c) hereto (the "Tooling Rights").
(d) Customer List and Marketing Material. All of Seller's customer lists
and all printed marketing material pertaining to the sale of Cuisine de France
merchandise; provided, that any reference on such marketing material to Swiss
Army Brands, Swiss Army or The Forschner Group shall be deleted and Purchaser
agrees to effectuate such deletion.
(e)Trade Show Booth. CDFL's trade show booth. (The Purchased Inventory and
trade show booth shall be sometimes collectively referred to herein as the
"Physical Assets".)
(f)Intellectual Property.
All of Seller's rights, including trademark rights, in and to the name
"Cuisine de France Limited."
All of Seller's rights in and to that certain U.S. letter patent no.
363.867 relating to knife sharpeners.
B. Retained Assets. Any assets of Seller not specifically sold by Seller
pursuant to Section 1(a) above shall be retained by Seller, including without
limitation, any accounts receivable arising from sales made prior to the
Closing.
SECTION 2. Consideration for the Sale of the Purchased Assets.
A. Purchase Price. Subject to the terms and conditions of this Agreement,
and in reliance upon the representations and warranties contained herein, the
purchase price (the "Purchase Price) for the sale, assignment, transfer and
delivery of the Purchased Assets by Seller shall be the following:
(a)$20,000 to be paid at the closing of the sale of the assets set forth in
paragraphs 1(b), 1(c) and 1(d) to occur on January 31, 1997 (the "Initial
Closing");
(b) $15,000 for the purchase of the trade show booth to be paid on March
31, 1997 (the "Booth Closing");
(c)The purchase price for the CDFL Inventory (the "Inventory Purchase
Price") shall be the following percentage of the value of such inventory as
indicated on the books of CDFL at January 31, 1997 or, in the case of the
"Celebration" knife sets, the following prices:
CUTLERY PERCENTAGE OF BOOK VALUE
Commercial 90%
Grand Chef 70%
Grand Chef White 100%
Super Sharp 50%
Never Needs Sharpening 50%
Au Carbone 90%
Sabatier Traditional 50%
Precision 50%
Shears 100%
Knife Sharpener 80%
Blocks 50%
Miscellaneous/Aprons 70%
2 piece Celebration set
4,200 units $12 each
3 piece Celebration set
1,000 units $15 each
PACKAGING
Commercial 90%
Grand Chef 70%
Super Sharp/NNS 50%
Shears 100%
Miscellaneous Sleeves 50%
Block Boxes 50%
B. Payment of Purchase Price. $20,000 of the Purchase Price shall be paid
at the Initial Closing by certified or bank check or by wire transfer. $15,000
shall be paid at the Booth Closing by certified or bank check or by wire
transfer. The Inventory Purchase Price shall be paid by check or by wire
transfer as Purchaser purchases the CDFL Inventory through October 31, 1997;
provided that at least one-half of the Inventory Purchase Price shall paid by
June 30, 1997 and all of the Inventory Purchase Price shall be paid by October
31, 1997. It is anticipated that Purchaser shall purchase the following percent
of the Inventory in the following months:
February 15%
March 10%
April 5%
May 5%
June 15%
July 15%
August 15%
September 10%
October 10%
C. Allocation of Purchase Price. The Purchase Price described in Section
2(a) above will be allocated as set forth in Schedule 2(c) hereto. Purchaser and
Seller represent, warrant, and covenant that such allocation was determined
through arm's length negotiations and that each will adopt and utilize the
amounts allocated to each asset or class of assets described in such schedule
for purposes of all federal, state and other Tax returns filed by it and that it
will not voluntarily take any position inconsistent therewith upon examination
of any such tax return, in any claim, in any litigation or otherwise with
respect to such Tax returns. Each party agrees to prepare and timely file
Internal Revenue Service Form 8594 (Asset Acquisition Statement) and to
cooperate with the other party in the preparation of such form. As used in this
Agreement, the term "Tax" or "Taxes" means any federal, state, local, foreign
and other income, gross receipt profits, franchise, license, transfer, sales,
use, payroll, withholding, employment, occupation, property, social security,
intangible, excise or other taxes, fees, duties, assessments, withholdings or
governmental charges of any nature (including interest, penalties or additions
to such taxes or charges).
SECTION 3. Liabilities.
A. Liabilities Assumed by Purchaser. Subject to the terms and conditions
herein set forth, at the Closing, Purchaser shall assume and agree to pay,
perform or otherwise discharge the liabilities and obligations of Seller (i)
incurred on and after the Closing Date as a result of events occurring on or
after the Closing Date under the Purchased Contracts and agrees to be bound by
the obligations of Seller thereunder; and (ii) the liabilities of Seller under
any product warranties relating to products sold by Seller regardless of when
sold.
B. Indemnification. (a)Seller hereby agrees to indemnify and hold harmless
Purchaser and its officers, directors and employees and its and their successors
and assigns from and against any and all liabilities, obligations, losses,
damages, amounts paid in settlement, diminutions in value, penalties, claims,
actions, suits, costs, expenses and disbursements, including reasonable legal
fees and expenses of whatsoever kind and nature imposed on, incurred by, or
asserted against any of them in any way relating to, or arising out of or
resulting from (A) the conduct of Seller's business or the ownership, use or
operation by Seller of the Purchased Assets at any time prior to the Closing
Date, except with respect to liabilities and obligations expressly assumed by
Purchaser under this Agreement; (B) any representation or warranty made by
Seller in this Agreement or in any other certificate, document or other
instrument delivered hereunder or in connection herewith which is incorrect or
misleading; or (C) any failure on the part of Seller to carry out and fully
perform any covenants or any agreements or other obligations contained herein.
(b) Purchaser hereby agrees to indemnify and hold harmless Seller and its
officers, directors and employees and its and their successors and assigns from
and against any and all liabilities, obligations, losses, damages, amounts paid
in settlement, diminutions in value, penalties, claims, actions, suits, costs,
expenses and disbursements, including reasonable legal fees and expenses, of
whatsoever kind and nature, imposed on, incurred by or asserted against any of
them in any way relating to, arising out of or resulting from (A) the conduct of
Purchaser's business or the ownership, use or operation of the Purchased Assets
at any time from and after the Closing Date, and the liabilities and obligations
which have been expressly assumed by Purchaser hereunder from and after the
Closing Date; (B) any representation or warranty made by Purchaser in this
Agreement or in any other certificate, document or other instrument delivered
hereunder or in connection herewith which is incorrect or misleading; or (C) any
failure on the part of the Purchaser to carry out and fully perform any
covenants or any agreements or other obligations contained herein.
All items covered by subsections (i) and (ii) of this Section 3(b) are
referred to herein as "Indemnified Claims".
(c)An indemnified party hereunder shall promptly notify the indemnifying
party in writing of the assertion of any claim asserted against the indemnified
party which might give rise to an Indemnified Claim against the indemnifying
party stating the nature and basis of such claim and the amount thereof. Except
as set forth herein, the indemnified party shall not pay or provide for the
payment or settlement or discharge of any such claim, for a period of fifteen
days after the date such written notice was given to the indemnifying party, but
thereafter may do so together with all costs and expenses incident thereto,
unless within such fifteen-day period the indemnifying party shall have provided
the indemnified party with notice that the indemnifying party reasonably
disputes such claim.
(d) In the event that any action, suit or proceeding is brought against an
indemnified party with respect to which an indemnifying party may have liability
under the indemnity agreement contained in this Section 3(b), the action, suit
or proceeding shall be defended (including all proceedings on appeal or for
review, which counsel for defendant shall deem appropriate) by the indemnifying
party by counsel of its choice. The indemnified party shall have the right to be
represented by an advisory counsel and accountants, at its own expense, and the
indemnified party shall be kept fully informed of such action, suit or
proceeding at all stages thereof whether or not the indemnified party is so
represented. The indemnifying party shall make available to the indemnified
party, its attorneys and accountants all books and records of the indemnifying
party relating to such proceedings or litigation and the parties hereto agree to
render to each other such assistance as they may reasonably require of each
other in order to ensure the proper and adequate defense of any such action,
suit or proceeding.
(e)An indemnifying party shall not make any settlement of any claims which
might give rise to an Indemnified Claim under the indemnity agreement contained
in this Section 3(b) without the written consent of the indemnified party,
provided that such consent shall not be unreasonably withheld.
(f)The rights of indemnification contained in this Section 3 shall not be
deemed to be the exclusive remedy of the parties hereto and such rights shall be
in addition to any other rights or remedies which any party hereto may have at
law or equity with respect to a default or breach by any other party under this
Agreement.
SECTION 4. Closings.
A. (a)The Initial Closing will take place at 10:00 A.M. (local time),
January 31, 1997, at the offices of Seller, One Research Drive, Shelton,
Connecticut.
(b) The Booth Closing will take place at 10:00 a.m.(local time), March 31,
1997, at the offices of Seller, One Research Drive, Shelton, Connecticut.
B. At each of the Initial Closing and Booth Closing, Seller shall deliver
to Purchaser a bill of sale, endorsements, assignments and such other
instruments of transfer and conveyance as shall be effective to vest in
Purchaser (A) good and marketable title to the assets to be sold to Purchaser at
such closing as provided herein and (B) all of Seller's rights in and under each
contract and agreement to be assigned to Purchaser as provided herein.
C. At each of the Initial Closing and Booth Closing, Purchaser shall:
(a) cause the cash consideration to be paid to Seller as provided in
Section 2 of this Agreement; and
(b) with respect to the Initial Closing, execute and deliver to Seller such
instruments of assumption or novation as shall be effective to transfer from
Seller at and as of the Closing Date those liabilities and obligations to be
assumed by Purchaser hereunder.
SECTION 5. Royalty Payments.
A. Purchaser shall pay to Seller an amount equal to 1.5% of any and all net
sales ("Sales Royalty") up to net sales of $3,500,000 per annum for all sales
from February 1, 1999 through January 31, 2003 and an amount equal to 1% of any
and all net sales up to net sales of $3,500,000 from February 1, 2003 through
January 31, 2004. For purposes of calculating the Sales Royalty, net sales shall
mean the invoiced amount of all products bearing the names Cuisine de France or
Sabatier sold by Purchaser or its affiliates less only returns and allowances
evidenced by credit memoranda. In determining net sales, no deduction made be
made for early payment discounts, bad debts, advertising allowances or special
promotions of any kind or for costs incurred in manufacture, sale, advertising
or promotion. A sale shall be deemed made when the products are invoiced,
shipped or paid for whichever is first to occur.
B. The Sales Royalty hereunder shall be due and paid semi-annually within
sixty days after the last day of July and January and shall be accompanied by a
statement certified by a duly authorized officer of Purchaser as accurate,
indicating, by month, the number and invoice price of all products shipped
during the period and a computation of the amount of Sales Royalty payable
hereunder.
C. Purchaser shall keep, maintain, and preserve in Purchaser's place of
business until at least January 31, 2006, complete and accurate records of
accounts including without limitation all invoices, foreign exchange
information, correspondence, banking and financial and other records pertaining
to the various items required to be shown on the reports to be submitted by
Purchaser. Seller, or its representatives, shall have the right to examine and
make extracts from all such records, including all invoices during business
hours. Purchaser agrees not to cause or permit any interference with Seller or
its nominees in the performance of their duties of inspection and/or audit.
If any audit shows that the amount of royalties paid by Purchaser to Seller
during the time period covered by the audit is less than the actual royalties
that should have been paid by Purchaser by more than ten percent (10%) of the
amount actually paid to Seller then the cost of such audit shall be paid for by
Purchaser.
The exercise by Seller in whole or in part, or at any time or times, of the
right to inspect or audit records and accounts or of any other right herein
granted, or the acceptance by Seller of any report or the receipt or deposit by
Seller of any payment from Purchaser shall be without prejudice to any other
rights or remedies of Seller and shall not stop or prevent Seller from
thereafter disputing the accuracy of any such report or payment.
SECTION 6. Representations, Warranties and Agreements of Seller.
Seller hereby represents, warrants and agrees with Purchaser as follows:
A. Corporate Existence. Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of Delaware, with full
corporate power and authority to carry on its business as presently conducted by
it.
B. Authority. Seller has full power and authority to execute, deliver and
perform this Agreement, and this Agreement has been duly authorized by all
necessary and proper corporate action of Seller and is the valid and legally
binding obligation of Seller in accordance with its terms.
C. Consents. Neither the execution and delivery of this Agreement by Seller
nor the consummation of the transactions contemplated hereby will violate or
conflict with, result in the breach of, accelerate the performance required by,
or constitute a default under, any provision of any order of any court or other
agency of government, the articles of incorporation or by-laws of Seller, or any
indenture, mortgage, agreement or other instrument to which Seller is a party or
by which it or any of its properties is bound or affected or will result in the
creation of any lien, charge or encumbrance on any of the Purchased Assets. No
governmental authorization, approval, order or consent is required in connection
with the execution, delivery and performance of this Agreement by Seller.
D. Title. Seller has good and marketable title to the Physical Assets, free
and clear of all mortgages, liens, pledges, charges, claims, restrictions,
defects of title or other encumbrances or rights of others of any kind
whatsoever.
SECTION 7. Limitation.
No representations or warranties whatsoever, other than the express
representations and warranties set forth in this Section 6 is made by Seller,
and except to the extent of the foregoing, SELLER HEREBY DISCLAIMS ANY
REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED, AS TO THE PURCHASED ASSETS
AND SPECIFICALLY DISCLAIMS (A) ANY REPRESENTATIONS OR WARRANTY OF
MERCHANTABILITY, USAGE OR FITNESS FOR ANY PARTICULAR PURPOSE AND (B) ANY
REPRESENTATION OR WARRANTY WITH RESPECT TO THE TRADEMARKS CUISINE DE FRANCE AND
SABATIER.
SECTION 8. Representations and Warranties of Purchaser.
Purchaser hereby represents and warrants to Seller as follows:
A. Existence. Purchaser is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of Connecticut, with
full power to carry out its business as presently being conducted by it.
B. Authority. Purchaser has full power and authority to execute, deliver
and perform this Agreement, and this Agreement has been duly authorized by all
necessary and proper action of Purchaser and is the valid and legally binding
obligation of Purchaser in accordance with its terms.
C. Consents. Neither the execution and delivery of this Agreement by
Purchaser nor the consummation of the transactions contemplated hereby will
violate or conflict with, result in the breach of, accelerate the performance
required by, or constitute a default under, any provision of any order of any
court or other agency of government, the operating agreement of Purchaser, or
any indenture, mortgage, agreement or other instrument to which Purchaser is a
party or by which it or any of its properties is bound or affected. No
governmental authorization, approval, order or consent is required in connection
with the execution, delivery and performance of this Agreement by Purchaser.
SECTION 9. Sales Taxes.
Purchaser agrees to pay and be liable for all sales, use or other transfer
taxes, if any, payable in connection with the sales, transfer and deliveries to
be made pursuant to this Agreement. At the Closing, Purchaser shall pay all such
taxes due or to become due or provide Seller with assurances satisfactory to
Seller that the same has been provided for and agrees to indemnify and hold
harmless Seller against and in respect of any and all claims, liabilities or
expenses which may be incurred as a result of the nonpayment of any such sales
or use taxes.
SECTION 10. Guarantee.
Messrs. Candler and Wolff hereby unconditionally, absolutely and
irrevocably guarantee to Seller all of the obligations of Purchaser hereunder.
This is a joint and several guarantee and shall remain in full force and effect
and be binding upon Messrs. Candler and Wolff; provided, however, that except
with respect to the obligation of Seller to pay royalties pursuant to Section 5
hereof and to purchase the Purchased Inventory hereunder, which the guarantee
shall continue in full force and effect with respect to, this guarantee shall
not apply to liabilities incurred and arising subsequent to three years from the
Initial Closing.
SECTION 11. Name Change.
Promptly following the Closing Seller shall file with the Secretary of
State of Delaware a Certificate of Amendment to Certificate of Incorporation
changing its name from Cuisine de France Limited.
SECTION 12. No Broker.
Each of Buyer and Seller represent and warrant to the other that no agent
or broker or other persons acting pursuant to authority given by either of them
is entitled to any commission or finder's fee in connection with the transaction
contemplated by this Agreement.
SECTION 13. Costs Incident to Agreement.
Each of the parties hereto will pay all the costs incurred by it incident
to the preparation, execution and delivery of this Agreement or the performance
of its obligations hereunder, including, without limitation, the fees and
disbursements of its counsel, accountants and consultants.
SECTION 14. Retention of Celebration Series Knives.
Seller may continue to market and sell its present inventory and any
present inventory not sold hereunder of "Celebration Series" knives, and any
inventory not sold to Purchasers for any reason, under the trademarks presently
being utilized in connection with such products.
SECTION 15. Accounts Receivable.
Seller hereby agrees that in the event it shall receive, for any reason,
payment with respect to goods sold by Buyer it shall promptly remit to Buyer, in
the form received by it, any such payment or proceeds. Buyer agrees that in the
event it shall receive, for any reason, payment with respect to goods sold by
Seller it shall promptly remit to Seller, in the form received by it, any such
payment or proceeds.
SECTION 16. Miscellaneous.
A. Assignment. This Agreement may not be assigned by either party without
the prior written consent of the other party. This Agreement will be binding
upon, and inure to the benefit of, the parties hereto and their successors and
permitted assigns.
B. Notices. Any notices or other communications required or permitted
hereunder must be in writing and will be deemed sufficiently given only if
delivered in person or sent by certified or registered mail, return receipt
requested, postage prepaid to the parties at the respective addressed set forth
below:
(a)If to Purchaser to:
Sabatier USA, LLC
3368 Fairfield Avenue
Bridgeport, Connecticut 06605
With a copy to:
Kenneth R. Wolff, Esq.
3 Manhattanville Road
Purchase, New York 10577
(b) If to Seller:
Cuisine de France Limited
c/o Swiss Army Brands, Inc.
One Research Drive
Shelton Connecticut 06484
(c) If to Robert Candler:
118 Dickinson Drive
Shelton, Connecticut 06484
(d) If to Robert P. Wolff:
344 Main Street
Mt. Kisko, New York 10546
Any Party by written notice to the other may change the address to which
notices shall be directed.
C. Entire Agreement. This Agreement constitutes the entire understanding of
the parties relating to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings, whether oral or written, relating
to the subject matter hereof. The terms of this Agreement cannot be changed,
released or discharged orally.
D. Waiver. Any term or condition of this Agreement may be waived at any
time by the party entitled to the benefit thereof by a written instrument
executed by a duly authorized officer of such party. No delay or failure on the
part of any party in exercising any rights hereunder, and no partial or single
exercise thereof, will constitute a waiver of such rights or of any other rights
hereunder.
E. Third Party Rights. Nothing in this Agreement will be construed as
giving any person, firm, corporation or other entity, other than the parties
hereto, their successors and permitted assigns any right, remedy or claim under
or in respect of this Agreement or any provision hereof.
F. Governing Law. This Agreement will be construed and interpreted in
accordance with the laws of the State of Connecticut applicable to contracts
made and to be performed entirely within such state.
G. Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed will be deemed to be an original; such
counterparts will together constitute but one agreement.
H. Headings. The section and other headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
CUISINE DE FRANCE LIMITED
By /s/ Robert Topazio
SABATIER USA, INC.
By /s/ Robert Candler
/s/ Robert Candler
Robert Candler, as guarantor
/s/ Robert P. Wolff
Robert P. Wolff, as guarantor
Schedule 1(a)
Inventory
Schedule 1(b)
Contracts
1. License Agreement dated January 1, 1993 between Coutel Inov and Cuisine
de France Limited.
2. License Agreement dated July 1, 1993 between Coutel Inov and Cuisine de
France Limited.
3. Agreement and Assignment dated March 7, 1994 between Marc Harrison and
Cuisine de France Limited.
Schedule 1(c)
Tooling Rights
[describe rights to tooling to be transferred]
Schedule 2(c)
Allocation of Purchase Price
Trade Show Booth $ 15,000
Goodwill $ 20,000
Inventory Remainder of
Purchase Price